Investors gave a lukewarm reception to news that Washington had reached a temporary deal to reopen the federal government and avert a potentially catastrophic default.

Remember the old adage 'buy on the rumor, sell on the news?' Seems as if that's the classic pattern Wall Street is following.

U.S. stocks rallied Wednesday as the deal took shape, with all three main indexes gaining more than 1%. Granted, futures are barely lower but investors have clearly lost some enthusiasm.

The agreement reached late Wednesday night provides a few months of breathing space but little progress has been made in bridging fundamental differences in Congress. That could mean renewed uncertainty and volatility in early 2014.

"Sixteen days of political wrangling and we finally have a deal in Washington but will we back here again next here?" asked Deutsche Bank analyst Jim Reid, in a market report.

It may also sap business and consumer confidence during the year-end holiday season, adding to the $24 billion hit to the economy caused by the events of the past two weeks.

China, the United States' biggest foreign creditor, welcomed the resolution of the debt ceiling crisis. But credit rating agency Dagong, which has close ties to the Chinese government, cut its U.S. rating, saying the country was only able to remain solvent by raising new debts.

"Hence the government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future," it said.

The dollar was weaker against other major world currencies, sinking as much as 0.7% against the euro and the pound.

IBM(IBM) shares sank 6% in premarket trading after the tech giant reported quarterly sales results that fell short of expectations. Shares of eBay(EBAY) fell 5% after the company offered weak guidance.

Shares of Goldman Sachs(GS) slipped after firm reported a year-over-year revenue decline. At the same time, Goldman's earnings per share topped forecasts and the company hiked its dividend by a nickel to 55 cents.

Verizon(VZ) shares jumped after the company reported a double-digit profit increase for the quarter.